CALCULATOR FULL SCREEN PRINTER VERSION BACK Exercise 20-08 a Your answer is partially correct. Try again. Innova uses 1,100 units of the component IMC2 every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows. Direct materials Direct labor Overhead $57.51 44.65 126.50 Total $228.66 Overhead costs include variable material handling costs of $7.50, which are applied to products on the basis of direct material costs. The remainder of the overhead costs are applied on the basis of direct labor dollars and consist of 60% variable costs and 40% fixed costs. A vendor has offered to supply the IMC2 component at a price of $210 per unit. (a) Prepare the incremental analysis for the decision to make or buy IMC2. (Round answers to 2 decimal places, e.g. 12.25. Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Income Increase (Decrease) Make IMC2 (per unit) Buy IMC2 (per unit) 57.51 57.51 Direct material JOO JOO 44.65 Direct labor 44.65 Version 4.24.20.1 Material handling X X 7.15 7.151 Wiley & Sons Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Make IMC2 (per unit) Buy IMC2 (per unit) Net Income Increase (Decrease) Direct material 57.51 $ sl 57.51 $ Direct labor 44.65 44.65 Material handling 7.15 I 7.15 Variable overhead 71.61 71.61 Purchase price 210 Total unit cost 180.92 210 -29.08 Should Innova purchase the component from the outside vendor if Innova's capacity remains idle? No Click if you would like to Show Work for this question: Open Show Work